Vmware Inc (VMW) Stock Fundamental Analysis
NYSE:VMW - US9285634021 - Common Stock
142.48 USD
-7.43 (-4.96%)
143 USD
+0.52 (+0.36%)
Overall VMW gets a fundamental rating of 5 out of 10. We evaluated VMW against 280 industry peers in the Software industry. While VMW belongs to the best of the industry regarding profitability, there are concerns on its financial health. VMW is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year VMW was profitable.
VMW had a positive operating cash flow in the past year.
In the past 5 years VMW has always been profitable.
Each year in the past 5 years VMW had a positive operating cash flow.
1.2 Ratios
VMW's Return On Assets of 4.43% is amongst the best of the industry. VMW outperforms 82.92% of its industry peers.
With an excellent Return On Equity value of 55.99%, VMW belongs to the best of the industry, outperforming 97.86% of the companies in the same industry.
VMW's Return On Invested Capital of 7.86% is amongst the best of the industry. VMW outperforms 85.05% of its industry peers.
VMW had an Average Return On Invested Capital over the past 3 years of 9.40%. This is below the industry average of 12.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.43% | ||
| ROE | 55.99% | ||
| ROIC | 7.86% |
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
1.3 Margins
With an excellent Profit Margin value of 10.48%, VMW belongs to the best of the industry, outperforming 84.70% of the companies in the same industry.
VMW's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 14.00%, VMW belongs to the top of the industry, outperforming 84.70% of the companies in the same industry.
In the last couple of years the Operating Margin of VMW has declined.
Looking at the Gross Margin, with a value of 81.19%, VMW belongs to the top of the industry, outperforming 86.83% of the companies in the same industry.
VMW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14% | ||
| PM (TTM) | 10.48% | ||
| GM | 81.19% |
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
2. Health
2.1 Basic Checks
VMW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, VMW has more shares outstanding
Compared to 5 years ago, VMW has more shares outstanding
Compared to 1 year ago, VMW has an improved debt to assets ratio.
2.2 Solvency
VMW has an Altman-Z score of 1.85. This is not the best score and indicates that VMW is in the grey zone with still only limited risk for bankruptcy at the moment.
VMW's Altman-Z score of 1.85 is in line compared to the rest of the industry. VMW outperforms 48.40% of its industry peers.
VMW has a debt to FCF ratio of 2.25. This is a good value and a sign of high solvency as VMW would need 2.25 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.25, VMW is doing good in the industry, outperforming 73.67% of the companies in the same industry.
A Debt/Equity ratio of 3.73 is on the high side and indicates that VMW has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 3.73, VMW is doing worse than 87.19% of the companies in the same industry.
Although VMW does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.73 | ||
| Debt/FCF | 2.25 | ||
| Altman-Z | 1.85 |
ROIC/WACC0.77
WACC10.18%
2.3 Liquidity
A Current Ratio of 0.87 indicates that VMW may have some problems paying its short term obligations.
The Current ratio of VMW (0.87) is worse than 82.56% of its industry peers.
VMW has a Quick Ratio of 0.87. This is a bad value and indicates that VMW is not financially healthy enough and could expect problems in meeting its short term obligations.
VMW has a Quick ratio of 0.87. This is amonst the worse of the industry: VMW underperforms 81.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.90% over the past year.
The Earnings Per Share has been growing slightly by 4.63% on average over the past years.
VMW shows a small growth in Revenue. In the last year, the Revenue has grown by 3.56%.
Measured over the past years, VMW shows a quite strong growth in Revenue. The Revenue has been growing by 11.17% on average per year.
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
3.2 Future
The Earnings Per Share is expected to grow by 7.04% on average over the next years.
VMW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.40% yearly.
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
VMW is valuated rather expensively with a Price/Earnings ratio of 20.59.
Compared to the rest of the industry, the Price/Earnings ratio of VMW indicates a rather cheap valuation: VMW is cheaper than 85.77% of the companies listed in the same industry.
VMW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.84.
A Price/Forward Earnings ratio of 17.40 indicates a rather expensive valuation of VMW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VMW indicates a rather cheap valuation: VMW is cheaper than 85.41% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of VMW to the average of the S&P500 Index (22.48), we can say VMW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.4 |
4.2 Price Multiples
85.41% of the companies in the same industry are more expensive than VMW, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, VMW is valued cheaply inside the industry as 92.53% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.2 | ||
| EV/EBITDA | 20.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of VMW may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)4.45
EPS Next 2Y12.07%
EPS Next 3Y8.72%
5. Dividend
5.1 Amount
VMW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
142.48
-7.43 (-4.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners0.21%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change0%
Market Cap61.52B
Analysts53.33
Price Target169.22 (18.77%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.18%
Min EPS beat(2)-5.43%
Max EPS beat(2)5.79%
EPS beat(4)2
Avg EPS beat(4)0.57%
Min EPS beat(4)-7.68%
Max EPS beat(4)9.61%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.31%
Min Revenue beat(2)-2.35%
Max Revenue beat(2)-2.27%
Revenue beat(4)1
Avg Revenue beat(4)-2.07%
Min Revenue beat(4)-5%
Max Revenue beat(4)1.34%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)9.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.95%
EPS NY rev (1m)0%
EPS NY rev (3m)2.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.4 | ||
| P/S | 4.52 | ||
| P/FCF | 13.2 | ||
| P/OCF | 12.08 | ||
| P/B | 24.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.29 |
EPS(TTM)6.92
EY4.86%
EPS(NY)8.19
Fwd EY5.75%
FCF(TTM)10.8
FCFY7.58%
OCF(TTM)11.79
OCFY8.28%
SpS31.52
BVpS5.9
TBVpS-17.18
PEG (NY)2.08
PEG (5Y)4.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.43% | ||
| ROE | 55.99% | ||
| ROCE | 9.79% | ||
| ROIC | 7.86% | ||
| ROICexc | 12.08% | ||
| ROICexgc | 56.72% | ||
| OM | 14% | ||
| PM (TTM) | 10.48% | ||
| GM | 81.19% | ||
| FCFM | 34.25% |
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
ROICexc(3y)12.19%
ROICexc(5y)13.94%
ROICexgc(3y)39.61%
ROICexgc(5y)182.58%
ROCE(3y)11.7%
ROCE(5y)12.97%
ROICexcg growth 3Y-2.41%
ROICexcg growth 5YN/A
ROICexc growth 3Y8.25%
ROICexc growth 5Y-17.26%
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
F-Score6
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.73 | ||
| Debt/FCF | 2.25 | ||
| Debt/EBITDA | 2.95 | ||
| Cap/Depr | 32.82% | ||
| Cap/Sales | 3.16% | ||
| Interest Coverage | 6.23 | ||
| Cash Conversion | 158.38% | ||
| Profit Quality | 326.93% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.85 |
F-Score6
WACC10.18%
ROIC/WACC0.77
Cap/Depr(3y)34.45%
Cap/Depr(5y)34.05%
Cap/Sales(3y)3.06%
Cap/Sales(5y)2.88%
Profit Quality(3y)236.48%
Profit Quality(5y)194.34%
High Growth Momentum
Growth
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
EBIT growth 1Y-16.59%
EBIT growth 3Y10.12%
EBIT growth 5Y2.37%
EBIT Next Year34.25%
EBIT Next 3Y19.61%
EBIT Next 5YN/A
FCF growth 1Y13.1%
FCF growth 3Y2.33%
FCF growth 5Y5.43%
OCF growth 1Y14.56%
OCF growth 3Y3.56%
OCF growth 5Y5.97%